2018 was a breakthrough year for Trade Ledger, with recognition in the KPMG FinTech 100, winners at the Finnies, the FinTech Awards and Barclays Innovation Challenge. 2019 promises to be even bigger as open banking creates the perfect set of conditions for the Trade Ledger platform to take off.
What kind of FinTech is Trade Ledger?
Trade Ledger is a banking platform technology designed to help banks and large non-bank lenders provide any type of credit to businesses and corporations around the world.
We have built a global platform, technology which can be instantly deployed in any country. Matt Born (co-founder) and I come from Enterprise Technology backgrounds. Trade Ledger came into being because we both wanted build what we call a ‘true platform’. We see a lot of FinTech’s claiming to provide platforms which in our view are nothing more than technology stacks for a specific product. These are not true industry platforms.
Enterprise Software, which is essentially what we do, is one of the most complex and difficult markets in business. We’ve been building Trade Ledger for a market which didn’t even exist when we set up the company. Globally the market we operate in is estimated as a $4 Trillion opportunity. Just the undersupply of credit for businesses globally is $2 trillion. That is the extent to which businesses are underserved with lending and capital. We call it ‘Lending as a Service.’ Nobody used the term when we set the business up two-and-half years ago.
Can you tell me how LaaS works?
Essentially LaaS is the outsourcing of the IT and operational requirements for the bank when it comes to lending. Typically, for a business to apply to a bank anywhere in the world for a line credit the average time to process the application is 90 days.
There’s about 30 hours of manual work for the customer plus 300 emails and 500 calls involved.
Trade Ledger eliminates the manual processes using API’s and accessing the banks data, completing the whole process in four minutes without a single document filled out.
What do you attribute to your success so far?
Matt and I followed our own path when we started the business. Trade ledger was incorporated in August 2016 and we were supremely confident we were building the right solution at the right time for the right market. Joining forces is the first thing we got right. What Matt, the team and I are doing is really, really hard and you need at least two co-founders to tackle all of the challenges ahead.
The combination of us working together has proven to be a real positive for the company and our personal lives. Matt and I both have extensive experience in enterprise software. We both worked at SAP and we witnessed software disruption in other sectors, it was only a matter of time before the same would happen in banking.
The blueprint was already there from other industries, it was just a case of applying the strategy to the right niche. Forming our partnership, our timing and product market fit are the keys to our success so far.
Can you tell me more about the Trade Ledger business?
The business is now 20 people, evenly split between London and Sydney. We’ve almost doubled the size of the company in the last three to four months. We are delighted with the ‘firepower’ we have hired into the business.
Firstly, we managed to find really high calibre senior engineers, the kind of people we think are potential game changers. In London, we’ve hired a CFO who is highly respected in the VC community. He will help turbo charge the growth of the business. We are embarking on Series A funding, having a CFO of the calibre we have is essential.
And in Sydney we have hired a Head of Customer Delivery coming from a prestigious consulting background. All this adds to the great talent we already have.
We don’t want a development center, and operational offices, we’re trying to keep uniformity across the offices. Fundamentally I believe three things will give Trade Ledger long-term differentiation, in the market-place.
The people in the organisation
The culture of the organisation
And what I call the velocity, are we moving fast enough in the right direction?
I don’t know if we are moving fast enough in the right direction yet, but we are accelerating.
What makes the culture of Trade Ledger unique?
The culture is very important to us. Matt and I have almost identical values and business ethics. Transparency is key to us, in terms of our business relationships and our people. We firmly believe when you’re trying to grow something this new, this quickly, you are going to break things, frequently.
It’s what you do when you realise you’re going in the wrong direction, or you’ve broken something which counts. And recognising which things you can break and what you absolutely have to get right.
Living by this ethos creates a culture of high performance which is the edge for a company like ours. Frankly, the banks struggle to attract the kind of people required for a high growth, exciting tech startup like Trade Ledger.
So, banks will have to partner with Fintech’s to access the talent, innovation and execution required for this next paradigm of business we are entering. Big organisations just cannot achieve the velocity required to keep up with the pace of innovation today.
What do you look for in the people you hire?
Primarily values and attitude. We don’t focus on people’s experience or their background, we focus on whether or not they would fit well with the team or will they be disruptive in the team. We love diversity. It does cause some challenges. The nature of diversity means it’s harder to evaluate how someone will fit, in the context of values and ethics.
And then the other thing we look for is high potential or high propensity for success. What we’ve found is interesting. People who are under-experienced, properly motivated and show high potential are a much better fit for this organisation than people who’ve got proven experience.
People with high potential fit our culture and the way we work. They want to get ahead quickly, they appreciate the opportunity to be able to contribute and to learn. And they understand the value it creates for them as an asset that differentiates them in the market.
What prompted your move to London?
A good question. Can I say, it’s really nice to be back in Sydney in the heat. From our perspective, Sydney is a great place to start a company. There’s a lot of benefits to be found in the FinTech ecosystem but there are limitations.
The market itself is relatively small, compared to other markets globally. With our ambition to be a global software company, we don’t see significant market penetration in Australia. Banks in Europe and North America don’t see Australia as a market with enough scale, so it is difficult to get credibility as a global player being based from Sydney.
Why choose London? After some consideration and research, the legislative changes in Europe and open banking in the UK made London the ideal launch pad for the Trade Ledger platform.
There’s massive investment from the banking sector in open banking technology, which from our perspective, is just API-based platform technology. The most innovative global bank transformation programs are happening in London. Lloyds alone has five transformation programs running, which, have a multi-year program budget of over 2.5 billion pounds. That’s the scale of transformation technology that’s happening in Europe and it’s hard to find anything comparable happening anywhere in Australia.
If we want to be a global company, we have to win the European market and more specifically the London market. Open banking, GDPR and other legislative changes have created a seismic shift to data-driven lending in the business bank and SME funding market-place.
The UK is now 12 months into open banking. What are the potential opportunities here in Australia?
The UK market has been really interesting, and for us, it’s great to have a ring-side seat to the first real implementation of open banking.
Year one was all about fixing the problems with the original scope, specification and approach to open banking. It went live late and there were a couple of issues with the implementation.
The challenge is shifting a heavily regulated market to a technology-driven business model in a record amount of time, it’s never been done before. All of the interested parties are struggling to keep up.
The regulators are finding it particularly difficult to figure out what to do when things go wrong. Liability, specifically the daisy chaining of liability and how to manage it, is turning out to be a significant problem. I think everyone has underestimated how big a shift this was going to be.
What can Australia learn from UK Open Banking?
Australia being number two into open banking is perfectly positioned to come up with the best capability in the world. It is a highly ambitious plan to implement open data across all industries. Conceptually this is where the market needs to go to.
The Australian market has perhaps underestimated the difficulty of implementation challenges. Something of this scale needs a very strong governance process. It needs to have a very, very high degree of consultation with all of the stakeholder groups.
My fear is the original scope could be thwarted, and open data never actually achieves the ambition outlined in the original agenda. Specifically creating competition in banking.
I wrote an article outlining my fears, published in the AFR. From the feedback I received, maybe people misunderstood my intention. I do not advocate any particular solution, Trade Ledger will prosper regardless of what Open Banking journey Australia chooses. I feel strongly that we need to have the right discussion about the national interest, because this is a once-in-a-generational opportunity Australia can’t afford to get wrong.
If Australia gets open banking right, it is my firm belief we can export financial services to other countries on a scale rivalling the mining industry. And if we get it wrong, then the opposite is true. Digital financial services does not observe national borders. Regulation, which once protected national markets has now become a grey area.
What does the future hold for Trade Ledger?
We are in advanced discussions with significant global banks. It is a distinct change in strategy for us. There is a much higher risk involved and a lot more investment up front.
If Trade Ledger is to become what we intended from day one, a global top three in the category, then it’s the direction we need to go in. We don’t shy away from risk or challenges, we embrace them, and we work harder, faster, and smarter to try and move in the direction we want to go.